Kigali — Rwanda's economy will grow in the range of 7- 10% this year higher than 6-7% previous projection.

Last year, the economy grew at 6% from 11.6% in 2008. Continuing performance in agricultural production and significant recovery in services and industry sectors justifies the new revised growth rate, according to the National Bank of Rwanda. The bank says inflation is expected to reach 6.4% at the end of 2010.

The agricultural sector grew at 8.2% in volume of foodstuffs production between January and June 2010 after a two year sustained growth. The sector contributes over 34% of Rwanda's economy and employs more than 80% of the working population. Exports value and volume continues to grow.

Tradable coffee is estimated to reach 26,000 tons compared to slightly over 14,000 tons in 2009 because of use of more fertilizers. Production of tea rose from 11,246 tons in the first six months of 2009 to 13,306 in the same period of 2010, an increase of 18.3%. Companies in the industry and service sectors registered a 20.9% turnover growth on annual basis in the first six months of 2010. Credit to the private sector increased and will continue to soar upwards as banks continue to recover more bad debts.

Rwanda's economic success is attributed to reforms in business environment. Rwanda emerged the best business reformer in the world, according to the World Bank's (WB) doing business report 2010. However, another WB report on Investment Climate Assessment (ICA) released recently says that Rwandan businesses continue to fall prey of high infrastructure costs (electricity and transport), high tax rates, high skilled labour costs and lack of access to finance.

The Rwandan officials say the government is working hard to address some of the challenges like electricity, payment of taxes and access to finance for Small and Medium Enterprises (SMEs).